Third rollback on PF by Arun Jaitley’s ministry, increases interest rate to 8.8%


Central government on Friday decided to bring the interest rate for PF feom 8.7 percent to 8.8 percent, third rollback this year.

The roll back comes on the heels of government having to withdraw an order restricting withdrawals of employers share in the employee provident fund (EPF) till an employee achieves 58 years of age. Last month, the government had to roll back a Budget proposal to tax EPF withdrawals.

The rollbacks on both the decisions followed protests from employees and their unions.

“I am happy that our Finance Minister has agreed for 8.8 per cent interest to be given for EPF workers for 2015-16. We will issue a notification of 8.8 per cent interest rate immediately,” Labour Minister Bandaru Dattatreya told reporters.

The latest U-turn by the Narendra Modi government came after the nationwide strike by central trade unions on 29 April.

10 central trade unions had opposed the Finance Ministry’s decision to lower EPF interest rate by 10 basis points. RSS-backed Bharatiya Mazdoor Sangh had already called a protest on Wednesday. .

The minister clarified that the EPFO’s apex decision making body the Central Board of Trustees headed by him, in its meeting held on February 16, 2016 at Chennai, recommended 8.8 per cent interest to be credited to EPF workers for the 2015-16 which would leave a surplus of Rs 673.85 crore.414821-jaitley-budget-cropped

Central trade unions had called for nationwide protest on 29 April over Finance Ministry’s move to reduce EPF interest rate to 8.7 percent.

Union Finance ministry on Monday had set aside retirement fund body EPFO trustees’ decision by lowering interest rate on PF deposits to 8.7 percent for 2015-16.

The decision had caused strong protest from trade unions that dubbed the move as ‘anti-labour.’




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